Jøtul Group - Interim financial report for the half-year ended 30 June 2024

The Jøtul Group (representing Jøtul AS together with its subsidiaries; the Group) is one of the three largest suppliers of fireplaces in Europe and a significant player in North America. The company, with a history dating back to 1853 through its legacy as one of Norway’s oldest companies, distributes stand-alone stoves, inserts, frames and accessories for fireplaces. The Group’s main brands are Jøtul, Scan and Ravelli. The Jøtul fireplaces are manufactured from cast iron and appear timeless and robust, with Norwegian origins. The Scan fireplaces are manufactured from plated steel and are characterized by modern Danish design, while the Ravelli pellets stoves are characterized by Italian design and technology. The head office is based in Norway. Manufacturing takes place through own production in Norway, Poland, France and the USA, in addition to a range of bought-in products. The products are sold through one of the most wide-reaching global networks in the industry, consisting of own sales companies and distributors. The products reach the end consumers through specialty shops, and in Norway also through building materials retail chains.

In in the first half of 2024, the Group’s revenue reduced by 41.6%, to MNOK 498.1, compared to MNOK 853.6 in the same period of last year. The downturn is mainly due to lower demand, which is driven by lower cost of energy (both electricity and natural gas), higher interest rates, lower home improvement spending, and slowdown in the construction industry (notably related to new houses and recreational homes). For wood burning stove manufacturers, the impact was further exacerbated by a significant accumulation of excessive inventory in the industry and at dealers’ stores, driven by a large build-up and strong order intake during the peak of the demand in late 2022 and in the early months of 2023. This has been observed as a key driver of weak sales in late 2023 and continued to be an issue throughout most of in H1 2024 in key markets like North America, Northern Europe, Italy and Germany.

During this period (H1 2024), the Group incurred a consolidated loss of MNOK -161.3 (H1 2023: profit of MNOK 114.9). The operating loss totaled MNOK -111.3 in H1 2024 (H1 2023: profit of MNOK 114.4). The total comprehensive loss for the half-year was MNOK -151.0 (H1 2023: profit of MNOK 149.3). EBITDA was MNOK -63.0 (H1 2023: MNOK 156.3) and Adjusted EBITDA (net of non-recurring items) was MNOK -42.9 (H1 2023: MNOK 162.1).

In a press release dated May 27^th, 2024, and related to the initiation or a written procedure to amend or waive certain provisions under the terms and conditions of the Bonds agreement, Jøtul provided guidance on certain full year numbers for 2024. More precisely, Jøtul estimated that the Adjusted EBITDA for 2024 will likely be well below the range of MNOK 250 – MNOK 300 which was previously forecasted and provided as guidance in a press release issued on December 7^th, 2023. The updated forecast for 2024 shows that, due to continued significantly weaker demand on the key markets, the Adjusted EBITDA for 2024 is expected to come in at MNOK 50 – MNOK 100. It is important to note that the Group has observed that destocking of previously mentioned excessive inventories at dealers’ locations has already occurred in most of the key markets and the high season is expected to generate normalized demand. Nevertheless, such demand will depend on customer sentiment, and further headwind is possible if the economic downturn continues. The liquidity is currently weak due to seasonality effects but is deemed to improve from the end of August and remain satisfactory for the foreseeable future.

For further information, please contact:
Jøtul AS
Adrian Postolache
Group CFO
Tel: +47 458 79 680
E-mail: adrian.postolache@jotul.no

The information was submitted for publication, through the agency of the contact person set out above, at 16:00 CEST on 29 August 2024.

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• Jotul_Interim_Financial_Report_June_2024